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Fraudulent Unemployment Claims Up

KSU Research and ExtensionNovember 9, 2020
A new report says the Kansas unemployment rate dipped to 5.5 percent last month.

Before you pitch that unidentifiable piece of mail without opening it – that bland envelope with no return address – think again. It could be the first warning that something’s amiss with your finances.

As COVID-19 swept through the country this year, ushering in the threat of illness, business closures and rising unemployment, it also led to a sharp increase in fraudulent unemployment claims linked to identity theft.

And Kansas isn’t immune. The state is seeing a historic increase in reports of fraudulent unemployment claims, according to a Kansas Department of Labor statement. KDOL said as of Oct. 6, it had prevented 45,000 identity theft-related fraudulent claims from being paid out.

KDOL said the fraudulent claims are filed using the names and Personally Identifiable Information (PII) of people who have not lost their jobs. Kansans are often unaware a claim has been filed on their behalf until they receive a “Notice of Determination” letter in the mail from KDOL, or until their employer receives a notice to verify the employee’s status.

“A review of these fraudulent claims indicates that scammers are obtaining personal information through activities such as credit card data breaches, email phishing schemes or sophisticated cybersecurity attacks and using that information to illegally attempt to collect unemployment insurance,” said Kansas Acting Secretary of Labor Ryan Wright in the Oct. 6 statement.

There are steps Kansans can take to protect themselves, as well as ways to mitigate financial damage if fraud occurs, said K-State Research and Extension financial management specialist Elizabeth Kiss. She advises:

  • Keep track of your financial information. Whether you get paper copies or electronic copies of bank, credit card, and retirement account statements, monitor them closely and routinely. That way, you’ll know the familiar from the unfamiliar.
  • Don’t let statements or other financial documents build up in your mailbox or sit in a pile of unopened mail.
  • Open your mail. Don’t assume something is junk mail or a donation solicitation and throw it away just because it’s not from a recognizable or familiar source. It could contain something you should be aware of.
  • Practice what Kiss calls “good financial management hygiene.” Don’t leave statements lying around the house where a service worker or casual acquaintance might see them.
  • Destroy documents you don’t need.

In this day of using cell phones and computers for conducting business online, people tend to check their postal mailboxes less frequently than they used to, Kiss said. That’s a mistake for a couple of reasons – it may delay notification about a problem with your credit; and in extreme cases, if the box is full, the postal service will stop delivering to it.

“If you find yourself in the unfortunate situation of recovering from someone’s attempt to use your identity to make a fraudulent unemployment claim or any financial fraud, keep a record of what you’ve done to rectify the situation, when you’ve done it and who you’ve spoken with,” Kiss said.

She recommends following steps outlined by the Federal Trade Commission on www.IdentityTheft.gov if you’ve been a victim of identity theft of any kind, starting with contacting companies where you know the fraud occurred.

In response to the increase in fraudulent claims in Kansas, KDOL created the www.ReportFraud.ks.gov website so individuals and businesses can report suspected cases of identity theft related to an unemployment claim. Once a claim is reported on the site, the system generates a police report number and tips for victims to use to help mitigate the damage from the theft. The agency’s fraud team can then prevent the fraudulent claims from being paid.

Just like monitoring your physical health, it’s important to stay vigilant in monitoring your financial health, Kiss said.

Copyright © Rocking M Media, 2020. All Rights Reserved. No part of this story may be reproduced without Rocking M Media’s express consent.

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